Wednesday, May 11, 2022

Warner Music CEO: Music Streaming Is A 'Sticky' Platform

Warner Music Group, home to the likes of Cardi B, Ed Sheeran and Bruno Mars, reported higher fiscal second-quarter revenue on Tuesday, driven by digital growth, According to The Hollywood Reporter.

Earnings for the latest period fell to $92 million from $117 million in the year-ago period, “primarily due to aggregate realized and unrealized losses on the mark-to-market of certain investments.”

Quarterly operating income rose though to $166 million from $151 million in the prior-year period, and operating income before depreciation and amortization (OIBDA) climbed to $255 million from $228 million, “primarily due to increased revenue.”

Steve Cooper
During an earnings conference call, Warner Music CEO Steve Cooper touted music subscription services as “sticky,” arguing that this was different from video streamers whose subscribers constantly search for the latest desirable content. “As the world grapples with war, inflation and other macro-economic concerns, one thing is certain: music’s ubiquity and value have already proven to be resilient through any kind of disruption,” he said. “Unlike the video streaming market, which churns as subscribers constantly search for new and different exclusive content, the music streaming market is sticky.”

He argued that users not only have “access to all the music they could ever want on a single platform,” but also become particularly “attached to the collections and playlists they have curated over time.” Concluded Cooper: “While films and TV series may come and go, devotion to one’s favorite music and artist is more deep-seated and longer-lasting.”

Total streaming revenue increased 9.0 percent, or 11.6 percent on a constant currency basis, driven by growth “across recorded music and music publishing, including revenue from emerging streaming platforms.”

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